Go Emerald was acquired by Sinwa in 2009 and is on a long-term charter in Australia. Photo: http://www.shipspotting.comTHE CEO OF Sinwa Limited, Bruce William Rann, disclosed during his interview with NextInsight in Aug 2013 (SINWA: Growing its business rapidly with new global client Sodexo) that Sinwa had a vessel chartering business which it wished to dispose of.
Sinwa owned two vessels -- a seismic survey vessel and an anchor handling tug.
Yesterday evening (March 10), some seven months on, Sinwa announced the sale of the tug GO Emerald for US$5.5m (equivalent to $6.9m), giving rise to a gain of $1m over book value.
Among other things, shareholders will note that the sale will increase Sinwa's cash level to $31.6m from the $24.7 m level as at 31 Dec 2013.
It had short term borrowings of $8.6m.
Bruce Rann, CEO of Sinwa. NextInsight file photoIn announcing the sale, Sinwa also disclosed that "it is the intention of the Directors to deploy the proceeds to expand the core business of the Group in marine, offshore supplies and logistics, to fund its working capital, regional expansion and reduce its bank borrowings."It did not touch on any payout of a special dividend but the company has been generous in its payments in the past financial year.
For FY 2013, Sinwa paid out 3.5 cents a share (comprising two rounds of special dividends of 1.5c each and an interim dividend of 0.5c) and proposed a final 1 cent dividend for sharehoplders' approval at the upcoming AGM.
The special dividends were paid out from the proceeds of the sale of its 50%-held liftboat, KS Titan 2, for US$42 million.
In the meantime, shareholders are looking out for developments in the long-running legal case surrounding Sinwa's third vessel, Nordic Energy.
Sinwa's share of the NAV of this seismic vessel was $15m as at 31 Dec 2013.
If the vessel is finally disposed of at not lower than this value, Sinwa's cash holdings will go significantly higher.
And it will raise prospects of another round of juicy dividends, and mark the end of Sinwa's not-too-happy venture into vessel chartering.
In the meantime, Sinwa's core business is doing fine.
Net profit attributable to equity holders rose to S$6.8m in FY2013 from a loss of S$5.8m in FY2012.
It would be S$7.5 million, if a loss from discontinued operations is not included as the Group is in the midst of winding up its engineering business.
Last year, the chartering business reported pre-tax profit of $1.15m and net $1.52m with a tax credit of $0.37m. Sinwa has to fill this gap after the sale.
Sinwa is the largest operator in the marine supply, offshore and logistics industry in Singapore.
Together with 4 foreign suppliers, the top 5 players account for between 65-70% of the total business, with another 100 other suppliers accounting for the balance.
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